It’s a great feature, and strengthens Safari on the iPhone as an application runtime that avoids the hassles of the App Store. Does it have wider value? A problem is inconsistent support across other browses. Microsoft’s IE8 supports DOM Storage (key-value pairs), which is also part of the HTML 5 standard, but not SQL. FireFox also supports DOM Storage, but its SQLite support is restricted to components and extensions only.
A possible reason for the lack of wider SQL support is that Google has its own implementation in Gears, which works in Safari and FireFox on the Mac, in IE and Firefox on Windows, and in Firefox on Linux. One place you cannot install Gears though is on the iPhone. A possible solution is to create a wrapper API that uses HTML 5 on Safari and Gears elsewhere; Malte Ubl has done some work on this, for example.
Personally I’d like to see the HTML 5.0 specification more widely supported, since along with the iPhone issue, not everyone wants to install Gears. I would have thought it could be added to both Chrome and FireFox relatively easily; but would be interested to know what is planned.